Help winning the "money game" - Posted by Ben (FL)

Posted by Michael (tejas) on June 21, 2001 at 01:16:39:

Hi Tim,

Well thought out reply, but since one of my points was only a few words, maybe it got lost in the shuffle.

I wasn’t taking the side, either side really, of Kiyosaki’s “poor dad”. As I said, Kiyosaki is good for pointing you in the right direction of what’s important, and that is certainly underserved in the academic world as you ably point out. I’ve got my BBA from UT and can confirm what you say.

You said the professional route is overrated in regards to wealth creation and I’ll agree as far as the general public is concerned. The general public does teach their kids the “poor dad” mindset about using academia to reach financial goals. There are numerous threads and articles on this site that denegrate college as a way to future wealth, but it’s a CANARD, a straw man argument!

This is a pet peeve of mine so forgive me, but college is not for learning to generate wealth. It’s never been and never will be. It’s never been promoted that way by the academics, only by families. Education was and still is a way to ascertain a certain level of living conditions as far as money goes, but not true wealth.

Here is the important part that the public doesn’t get: Upper education is to teach one to think critically, especially within a certain discipline. That’s it, no more. You always hear kids crying that they will never need advanced math in real life so why learn it. They are right they probably won’t use it. But there is no better way to train your mind to think logically than math. And the more powerful your logical mind is the easier you life will be for making every decision the rest of your life, from cutting through the BS of advertising to one’s romantic life.

There are people who get rich without it, but a rigorous workout of the mind by way of college would have made them even better thinkers. And this doesn’t even touch upon making you a better citizen and more interesting person because of your better understanding of America and it’s culture.

You’re right in that I didn’t consider that the poster’s question may have been more about money than financial literacy, he’ll have to clear that up. The poster wanted to get rid of his “ignorance of numbers” and I know of no better way than my suggestion.

I bet Barton Springs feels really good about now,

Michael

Help winning the “money game” - Posted by Ben (FL)

Posted by Ben (FL) on June 20, 2001 at 10:58:25:

I’m finally reading “Cashflow Quadrant,” and I’m appalled at how ignorant I am about money. Kiyosaki is very good at laying out broad concepts and ideas, but if I want to learn to know about money, where else can I go? I have done very well over the last 2 years with real estate, but I’m becoming aware of how risky my position is because of 1) my ignorance of numbers and 2) I owe more people than owe me.

I fully intend to be VERY successful at the game of money, as he puts it, but I need some primers - sort of “Money for Dummies” sources that are not filled with all the B.S. like “Your home is an asset”. Any suggestions??

Re: Help winning the “money game” - Posted by g

Posted by g on June 21, 2001 at 07:11:59:

Ben, I agree - Kiyosaki is revolutionary in sharing a new way of thinking about wealth. The thing that is most compelling to me besides the unique ways of looking at assets and factual financial analysis is the resolve of rich dad.

Here is a guy who started with nothing and shared it with the neighbor kid, kiyosaki…

A big man about 6 feet tall and 200 pounds. Never finished the eighth grade. Had a lot of power behind his words and smile. Encouraged talking about money and business at the dinner table. Paid his bills on time. Paid himself first. Paid his bills last. Believed in total financial reliance. He was emphatic about being financially competent. Worked long hours. At age 35, owned warehouses, a construction company, a chain of 9 7-11 style superette stores, and three restaurants in 1956. Two construction supervisors, a warehouse manager, lady restaurant and store managers, over 150 employees. Hugged his supervisors. Told it as it is. Lived in an aging, small, tidy home with wooden floors and a dingy office. Drove a sputtering pickup truck. Learned how money works so he could make money work for him. Created investments. Taught how to write strong business and financial plans to create jobs. Encouraged study to be rich, to understand how money works and to learn how to have money work for you. Encouraged others to know the difference between assets and liabilities. And to acquire assets. Always stressed the importance of financial literacy. His banker raved about his brilliance when it came to making money. Referred to himself as rich. Grew stronger financially. Often held meetings with his bankers, attorneys, accountants, brokers, investors, managers and employees. Here was a man who had left school at the age of 13, now directing, instructing, ordering and asking questions of educated people. They came at his beck and call, and cringed when he did not approve of them. Here was a man who had not gone along with the crowd. He was a man who did his own thinking and detested the words, “We have to do it this way because that’s the way everyone else does it.” He also hated the word “can’t.” If you wanted him to do something, just say, “I don’t think you can do it.” Became one of the richest men in Hawaii. Died leaving tens of millions of dollars to his family, charities and his church. Whoa… :o)

Re: Help winning the “money game” - Posted by Dave T

Posted by Dave T on June 20, 2001 at 23:34:49:

I suspect that you are really saying that you have no trouble making money – even lots of money. You are already using real estate as a path to wealth, and because you are successful, knowledge about this business does not seem to be an issue.

I am reading between the lines here, but I suspect that you are really asking how to hold on to more of the money you are making. If you are doing a nice volume but spending more along the way, then how to increase your net worth is the real question.

If I am correct in my assessment, then, “The Millionaire Next Door” is the book you should read. Written by Thomas Stanley and William Danko, this book points out lifestyle patterns that either consume your wealth or increase your net worth, and suggests that you adopt those lifestyle patterns that make you rich.

Re: Help winning the “money game” - Posted by Michael (tejas)

Posted by Michael (tejas) on June 20, 2001 at 21:29:01:

No disrespect to the posters below, but do you want a professional education or do you want to settle for watered down platitudes?

If you want to really understand numbers, and Eric C said below that math skills is one of the two things key to his success, then either take some basic accounting and finance (not personal finance) classes
at a local college or you can just go to the college
bookstore and buy the class textbooks.

Kiyosaki has his place and it’s to tell you what’s important, but he’s woefully short in telling you how to do the math. You can hire all the CPA’s you want, but in the end you have to understand what they say and make the decisions yourself.

And Kiyosaki’s wrong, your house IS an asset, the mortgage is the liability. He’s just trying to tell people to quit living beyond their means and invest.

If Kiyosaki’s banker asked him for a personal financial statement, is he going to leave it off the asset column? I’d bet anything I own that he wouldn’t.

Michael

Re: Help winning the “money game” - Posted by Ronald * Starr

Posted by Ronald * Starr on June 20, 2001 at 14:59:36:

Ben–FL--------------

Gee, I don’t think it matters too how many people you owe money, even compared to how many people owe you money.

The important things are
to have more assets and grow those assets.
have sources of income to pay your bills and debts
be collecting the money that people owe you
Have more money coming in than is going out (actually more money + growing assets than going out)

Good Investing and Good Reading***Ron Starr

Re: Help winning the “money game” - Posted by SueC

Posted by SueC on June 20, 2001 at 14:17:50:

Accouting for Dummies or the Motley Fool books will help you learn to read financial statements and understand the details. AFD is really very good as it’s written with business people in mind, not other accountants.

some recommendations… - Posted by TRandle

Posted by TRandle on June 20, 2001 at 12:18:16:

Ben,
I’ve found few authors who share Kiyosaki’s philosophies, but each of the books below has some good information:

Think and Grow Rich - Napoleon Hill
Richest Man in Babylon - George Clason
Wealth and Poverty - George Gilder
Financial Peace - Dave Ramsey
Kiyosaki’s games Cashflow 101 and 102
Creating Wealth - Robert Allen
Multiple Streams of Income - Robert Allen

Hope that helps…take care

Re: Help winning the “money game” - Posted by Ben (FL)

Posted by Ben (FL) on June 21, 2001 at 11:59:07:

Well, sort of. I hear things like: “Jimmy Napier can do that because he understands money very well…” Well, what does it mean to “understand money very well?” What is internal rate of return? Is it importnant to know what the yield is, or is it just enough to know your net? How can I legally avoid as many taxes as possible? It’s entirely possible that I CAN read a financial statement…if I knew what one looked like? Maybe I have seen one - It just wasn’t labeled “Financial Statement” across the top.

I have an advanced degree in Geology. I took 20 hours of calculus. I took Economics 101 (macro) 15 years ago. I have NO formal financial education. I didn;t even know how to compute simple interest until my first RE course. Now, I may know alot more than I think I do. After all, no one gave me the property and cash flow I have been able to accumulate. However, just from listening and reading other people talk about the deeper aspects of money and finance (more than just net income, cash throw off, and interest), I know there’s much out there still to learn to reduce my future risk.

Re: Help winning the “money game” - Posted by David Alexander

Posted by David Alexander on June 21, 2001 at 11:41:52:

Not to bring up the old argument again… but I would take that bet on "his defintion of an asset"
Asset takes money and libility eats money, that simple.

He in fact goes into the same thing in his latest book written by his CPA, Diane Kennedy, about not putting so called assets on your books for yourself… he even says the banker will call it an asset.

As far as the rest… their are two ways to have money… create alot or save your way to wealth…

I subscribe to the first way… in the beginning phases at least and then in the end keeping some of those assets your created working for you… as like the saving part.

It all comes down to business business acumen and i dont think you need further formal education… simple because the math you need to know you learned in the third grade. Put a dollar in and get two out… real simple. And also just understanding cash on cash returns, cash asset to cash as fast as possible.

David Alexander

Two Distinct Paths? - Posted by TRandle

Posted by TRandle on June 20, 2001 at 22:29:47:

Michael,
No disrespect toward you either and I do understand your point, but perhaps Ben actually asked two distinct questions; 1)how do I learn more about numbers?, and 2)how do I learn more about money?

I’ve taken the “professional” education route, and please take the following as qualifying my opinion as opposed to boasting. I have a BBA in Finance, I’m a CPA, studied for the CFP, had a Series 7 securities license, Group 1 and Group 4 insurance license, briefly a loan officer, briefly a financial planner, and was a financial analyst for many years. In my opinion the professional education is highly overrated in regards to wealth creation and retention.

I do agree that it’s important to understand macroeconomics, how to read financial statements, and the many other beneficial aspects of studying finance and accounting. Most of my studying was done outside of the professional education arena. From my experience, it’s critical to understand the numbers in order to make informed, intelligent decisions. However, that knowledge alone is a very slow way to financial independence.

It’s the “platitudes”, business acumen and entrepreneurial theories that bridge the financial knowledge to financial freedom. I agree with you that schooling will assist with understanding numbers, but other than basic financial theories, it has relatively little impact in regards to understanding the generation and retention of income and/or wealth.

Not that it’s proof, but if we consider the number of people who are financially successful, I think we will find an extremely high percentage don’t have that much professional education.

Just thought I’d share my interpretation of Ben’s questions…

Used bookstores - Posted by Tim_AZ

Posted by Tim_AZ on June 21, 2001 at 14:02:28:

I have found several of these and other books in used bookstores. Sometimes I wonder if it really is a good book if someone else didn’t want it, but trust me, these books are good. I picked up “Think and grow rich” for about 3 bucks, and Kiyosaki’s “Guide to investing” for 10 bucks, half his new price. The condition is still good, too. It’s a book, the condition doesn’t really matter to me as long as all the pages are there. There is a great store here in Tempe, AZ with thousands of great used books, and they get more all the time. I also recommend anything by Og Mandino. HTH